Zanini: Continuous Innovation in Wheel Trim Applications

Q: What factors allowed Zanini to evolve from a family-owned company to a global manufacturing automotive supplier?

A: First and foremost is having the willingness to do it. Going global represents a great effort both financially and organizationally, which requires a change in mindset. The key to achieving our global manufacturing footprint has been our leadership in a specific product. Our motivation has been to maintain our leadership in the wheel trim segment. To do so, we expanded our capacities to other continents to supply most of the world’s automotive groups.

One out of every four wheels in the world has Zanini components. In North America, we hold more than one-third of the wheel trim market. In Europe, we have around 30 percent market share, and we hold around 50 percent of the market in the MERCOSUR region. China is our latest venture.

Q: What role does Mexico play within Zanini’s global operations?

A: Mexico was our first venture outside Europe and it has always been a fundamental market for us, considering OEM production strategies. We arrived in 1999 to support Volkswagen Group’s operations and quickly recognized that the country was an important automotive manufacturing hub, even 20 years ago. Consequently, we worked to grow our business model and operations in Mexico to supply all North American regions.

Q: How do wheel trim products influence the end consumer’s final purchasing decision?

A: Beyond aesthetics, wheel trims also have an important functional element. We merge style with functionality as these components are placed in a dynamic element, the wheel while facing rough environmental conditions. Wheels are a very important factor when assessing the vehicle’s attractiveness. OEMs focus greatly on this element to ensure the customer has a wide variety of options to choose from.

Given the EV revolution, the aerodynamic aspect of wheel trims is gaining importance. There is a stripe in the wheel that helps the vehicle to improve aerodynamics, thus increasing vehicle autonomy. We are not only specialized in wheel trims but also in the central pieces of spare wheels where the brand logo is. Another important trend is the aerodynamic components for electric vehicles with alloy wheels. Decorating these kinds of vehicles is difficult but with plastic components, the vehicle can achieve greater efficiency.

Q: How is Zanini’s product portfolio adapting to growing vehicle connectivity needs?

A: In Europe, we are developing a new product line for front line emblems behind which radar is hidden. This piece is of utmost importance. It is the frontal emblem of the vehicle but it also has the functionality, so electromagnetic waves must be able to propagate with the least attenuation and distortion. For level 5 autonomous vehicles, the functionality should hold up under any conditions, including weather. As for wheel trims, we are exploring the use of sensors, cameras, and other components to improve the autonomous driving functions of the vehicle. Zanini is also exploring the possibility of creating applications that generate energy from the movement of the wheel itself.

Q: What opportunities does Zanini find in a changing trade environment?

A: Trade wars hinder growth as they unbalance the global market trying to protect local suppliers. On the other hand, free trade agreements provide clarity, which in fact generates opportunities. For the Mexican market, USMCA is really important. Our plant in Queretaro supplies the US market and new rules of origin will not represent an obstacle to continue to develop our business in North America.

Q: Does Zanini prefer acquisitions or greenfield projects?

A: I personally prefer greenfield projects over acquisitions as they work better in the long term. Mexico, Brazil, India, and China have been our greenfields. But we have also acquired companies in France, Italy and the US that had a similar experience to ours. A greenfield project requires higher investment due to the manufacturing and painting capacities we need to install and ROI is normally seen in a two-year-period.

Transferring operations is also a challenge as you have to select carefully the people leading the project, for example. This person will not only focus on production but also on adapting to the country and its culture while sharing our company’s values. This is easier in a greenfield project than in an acquisition. In the latter, due to the context of the acquisition, integration can be more complicated as you adapt previous methods.

Q: How has Zanini adapted to the global coronavirus pandemic?

A: The pandemic has affected the entire industry. We started to feel the effects at our manufacturing plant in China, and in March, we saw our European operations disrupted and a little bit later in Mexico. The pandemic had an overall 25 percent impact on our sales in March, which increased to 85 percent in April and then dropped to 45 percent in May. By June, we had a 30 percent impact on our sales. For July and August, we are stabilizing our pre-pandemic levels.

Despite this, our plans remain intact. We have successfully adapted by being flexible in our costs and operations. We expect positive results by the end of the year, albeit not the same as the previous years.

Q: What has allowed Zanini to maintain its leadership during these difficult times?

A: Information is vital. I personally established direct communication with all the regions where we operate. I also reassure everyone about strategies to cope with the pandemic. The group has not required additional financing and we are continuing with our investment project in Barcelona, where we will have a new plant to manufacture electromagnetic, transparency, and backlighting components. From the very beginning of the crisis, we implemented safety measures at all of our locations and migrated to home-office schemes. Among the group’s employees around the world, we have had just one COVID-19 case, which was in Brazil.

Q: What are Zanini’s priorities for 2020?

A: We are at the initial stage of ramping up our operations in India. This greenfield will remain our priority as we continue to grow in the country. Another priority is our electromagnetic, transparency, and backlighting products, which are innovative products for the market. We are developing this first product line for the Volkswagen Group at the global level.

Zanini will also focus on new wheel trim business lines, particularly the inserted pieces in alloy wheels needed for assembly, instead of screws, which can be more expensive. The alloy wheel market went from a threat to a great business opportunity for us.

Mexico was our first greenfield project and this has been a really positive experience despite the years it took us to consolidate its capacities. Now, we can produce in Mexico any wheel trim component with the quality and requirements demanded by the automotive sector. Throughout the years, we have grown our customer base in the country, which has given us an important balance. In the automotive sector, there are winners and losers and Queretaro is one of the most important regions we aim to potentialize.

Zanini Auto Group is a Spanish company with manufacturing operations in Brazil, China, India, Mexico, the US, France, Italy, and the Czech Republic. The company is specialized in wheel trims and related products for steel and alloy wheels